Carbon Weekly Newsletter

This newsletter was published 29.7.2020 at 18:26pm CEST

The current prices on the European carbon market are as follows:

EUA prices are almost unchanged since last week despite increased intraday volatility. Prices briefly traded below 25 EUR/EUA this Monday but have started to recover again. It seems that the anticipation of lower auction volume, that starts next week and will last until the end of August, is just enough to push the prices higher. We will have to wait and see how the first few auctions in August perform, to get a feeling of how much demand there is right now. Auction results in the previous days have been very mixed. The one thing that was common to most of the auctions is that EUAs moved up soon after the outcome was announced, with only a single exception. Another interesting behaviour is the unusual strength of the market in the last two trading hours of the day, when the US equity markets open. EUA prices saw many late day rises until the close, which would suggest that some bigger buyers are targeting the settlement price. Both observations show that even though the market is down in the last two weeks, buyers are still very active, therefore any bigger price moves down would be unexpected and market could continue to crawl back up.

German power prices are down 0.70 EUR/MWh since last week, with the front year contract trading at 39.50 EUR/MWh. API2 coal prices are down 1 USD/tonne since last week, with the Cal21 contract trading at 59.70 USD/tonne. EUR/USD is up 200 points since last week and is currently trading at 1.1770.

Price development of EUA Dec2020 futures contract
Yours sincerely,
Jan Kresnik 
Carbon Trader

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